Veolia: Lower energy prices and lower construction activity hit revenue

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Quelle: Veolia Deutschland

Paris, France — According to Veolia`s latest nine month report, the company`s balance showes continued strong results growth due to cost savings and despite an unfavourable exchange rate impact and a slight decline in revenue: Revenue for the nine months ended September 30, 2016 declined 3.2 percent (-1.2 percent at constant exchange rates) to €17,708 million compared with €18,288 million for the prior year period. At constant exchange rates and excluding the impact of lower construction revenue and energy prices, revenue increased 1.6 percent due to solid commercial performance and an overall positive impact, though limited, of price indexation.

The unfavorable movement in exchange rates penalized revenue growth by -1.9 percent in the first nine months (-€354 million). Lower energy prices, primarily in the first half of 2016, weighed on revenue to the tune of -€114 million (-0.6 percent of revenue growth), and lower construction activity hit revenue by -€396 million (-2.2 percent).

  • Revenue in the Europe excluding France segment was also largely stable (-0.4 percent) at constant exchange rates for the nine months, following -0.3 percent in the first half. Revenue in Germany increased due to strong performance in Waste. United Kingdom revenue declined 1.7 percent at constant exchange rates, but excluding construction revenue (which was down by -€53 million due to the end of construction of the Leeds plant) was up by 1.4 percent. Central and Eastern Europe revenue posted a decline for the nine months due to lower electricity volumes and prices in the Czech Republic and Lithuania, partially offset by higher invoiced water volumes (+1.5 percent).
  • In France, revenue for the nine months was largely stable (-0.6 percent). Water revenue was negatively impacted by lower volumes (-1.7 percent) and weak price indexation (+0.2 percent), but posted a slight progression due to the benefit of new contracts (primarily Lille). Waste revenue declined by 1.6 percent, as in the first half, given stable volumes (+0.1 percent), and the impact of the fall of scrap metal prices. However, the contract renewal rate was very good and commercial development was strong, including the award of the Troyes waste to energy plant contract.
  • The Rest of the World segment continued to improve, posting 1.9 percent growth at constant exchange rates for the nine months, with Q3 revenue up 6.3 percent (after Q1 down 2.4 percent and Q2 up 1.9 percent). At constant exchange rates, revenue in the United States declined 3.5 percent for the nine months ended September 30, 2016, after a -9.4 percent decline in the first half due to lower energy prices and volumes, and the fall in industrial services revenue. Revenue growth improved in the third quarter, due to the integration of the sulfuric acid regeneration business. Asia revenue increased 3.4 percent, with accelerated growth in China in the third quarter (+17.6 percent at constant exchange rates), which benefited from the Sinopec contract. Latin America grew 10.9 percent and Africa Middle East grew 8.9 percent. Revenue in Australia declined by 4.2 percent, penalized by lower industrial services activity.
  • Global Businesses revenue decreased 5.2 percent at constant exchange rates. Hazardous waste activity continued to grow (+2.7 percent), while the progressive downsizing of construction activities in Veolia Water Technologies and SADE continues.

The full nine month report can be downloaded under veolia.com.

Source: Veolia Group